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Can customer due diligence be effective in an era of fake news?

Can customer due diligence be effective in an era of fake news?

Financial Crime Compliance,
27 June 2019 | 3 min read

Find out how Swift KYC Adverse Media can support your customer due diligence.

Where do you get your news? Today, there is more choice than ever before. Partly due to the ease with which information can be published on the internet, established news agencies and media outlets have been joined by newcomers, who tend to focus their limited resources on grabbing attention, rather than investing in accuracy.

Research also shows we increasingly favour media that reflect our own opinions and biases. This means there is a greater risk that many of us get our information from sources that are more interested in page views and clicks than fact-checking.

Who can you trust?

A related issue arising from the plethora of new outlets is the difficulty of identifying reliable sources and the overall deterioration of trust in any information provider. From mainstream media sources that do not give equal airtime to a wide range of opinions, to smaller start-ups that wilfully misrepresent or even make up statistics, everyone faces the accusation of “fake news”.

Who, if anyone, can you trust?

Covering all bases

This question is critical in the context of the due diligence and financial crime compliance obligations of financial institutions. Regardless of fake news and clickbait headlines, we are undoubtedly living in a fast-changing and unpredictable world. And reliable sources of information are paramount in helping to interpret changes in power, policy, risk and reputation.

Regulators expect banks to use accurate, comprehensive and timely “negative news” services that cover news and regulatory notices as part of a risk-based approach to regulatory compliance. The sanctions regimes of governments evolve rapidly and changes in policy can be triggered by any number of unforeseen developments.

Similarly, the fortunes of customers and counterparties can rise and fall in an instant, due to disruptive competition, revoked licences, pollution fines or supply chain difficulties, to name but a few potential pitfalls.

When onboarding new clients, compliance teams need a diverse range of data. But when you are drowning in data sources, ensuring quality and relevance, potentially on a budget and at short notice, can be a tough call.

A trusted source

Currently, more than 5,500 banks, representing more than 80% of Swift traffic, use the KYC Registry, which helps users better manage risk and reduce the cost and effort related to correspondent due diligence compliance.

The KYC Registry is a secure, shared platform to exchange standardised KYC data. This central repository is accessible on demand by authorised institutions only.

To strengthen our offering, KYC Registry users can now also access the KYC Adverse Media service, a global source of high-quality, curated adverse media content. This gives you access to negative news content and regulatory notices from Dow Jones Risk & Compliance, meaning all due diligence information is available through a single portal.

With KYC Adverse Media, users can turn a blind eye to fake news and focus on the facts. 

A leader in its field, Dow Jones provides:

  • adverse media coverage across almost 150,000 entity profiles globally, using a comprehensive classification system to ensure accurate and actionable risk and compliance information
  • negative news content linking directly to the KYC profiles of specific entities within the Registry, so users can easily identify the associated news item or notice
  • simple, user-friendly access to a comprehensive and reliable news archive, keeping users up to speed through continual updates and automatic refresh

In today’s word of fake news, KYC Adverse Media is a highly valuable and effective service to support your customer due diligence.